Labor unrest brewing in the Panama Canal

By Eric Jackson, labornews, 11 December 1998

Uncertainties about next year's canal reversion are being exacerbated by presidential proclamations and ongoing disputes, and that has prompted the canal workers' unions to move on several fronts. The grievances were aired at a November 25 press conference with leaders of six unions and a gathering at the Panama Canal Commission (PCC) Administration Building two days later.

The National Maritime Union's Orlando Diaz complained that "employee morale is very low," because "the administration hasn't been serious" in its labor relations. He pointed to a recent arbitration award, in which a commission attempt to give the employees a lower 1998 cost of living wage adjustment than had been agreed by the US government was rejected. President Clinton had signed an executive order giving canal workers raises of 2.3 to 2.8 percent, but the PCC board only approved a 2.2 percent raise. The unions took the case to arbitration and recently prevailed, which means that the members will soon be paid the difference between the raise they already received and the larger amount, retroactive to last January.

President P rez Balladares's predictions of multi-million dollar savings after the canal reverts-he'll be out of office by then, but he says that the money will be spent on education-arouse fears that the payroll reductions will reflect not only the end of various privileges that the remaining American employees get and the effects of a transition-time reduction in force, but also a move to push canal workers' pay and benefits down to levels found elsewhere in the Panamanian economy. The legislation that created the new Panama Canal Authority that will take over at the end of 1999 had already stirred up these apprehensions, because it provides that the canal will be run on a profit basis rather than on the established break-even formula.

The union leaders also say that they're disappointed with the number of positions that will be "bought out" through early retirement incentives. "We know that positions will be abolished," D az said, "but that doesn't necessarily mean that people will be out on the street." His problem is that he can't assure the rank-and-file that it won't mean that.

The six unions-the National Maritime Union, the Panama Area Metal Trade Council, the International Association of Firefighters, two locals of the International Organization of Masters, Mates and Pilots, and the marine engineers' MEBA-said in a joint statement that they're talking with both the US and Panamanian governments to protest what they claim are broken promises and to "avoid a possible trauma on the waterway."

When union members went to the Administration Building to protest at the Labor-Management Council meeting on November 27, PCC Administrator Alberto Alem n Zubieta unexpectedly showed up to talk with their leaders. According to D az, the canal's top manager protested that the PCC's policies are misunderstood, said that the massive layoffs that some predict aren't in the cards, and promised to keep labor-management communication channels open. Alem n Zubieta reiterated the PCC's policy of trying to avoid layoffs through voluntary retirements and said that the positions to be eliminated will be those that aren't essential to canal operations.

* This was a tale written for Panama's English-language press, so the importance of some things is well known and not stated for that readership. For the rest of you, understand that the canal work force is more than 90% Panamanian, is represented for the most part by AFL-CIO unions, is highly skilled and commands wages and benefits on a par with those in developed countries. If this relatively privileged labor sector and its unions get beaten down to Third World standards, it will have a ripple effect throughout the Panamanian economy and go along way toward eliminating the Panamanian middle class.